Southern Cross payments on slow drip

By MARTIN JOHNSTON

Members of Southern Cross, the country's largest health insurer, have been forced to wait up to six weeks for payment of their health treatment bills.

Private hospitals and clinics which treat Southern Cross members have also been left waiting longer than usual.

The Southern Cross Medical Care Society yesterday blamed the delays on problems in transferring its 800,000 members to a new computer system, a process that took several months and was completed this month.

Chief executive Roger Bowie said the delays were unacceptable, and members would be paid.

"It's just a combination of seasonal factors [the Christmas rush of members' claims] and the fact that everybody is on the new system."

Mr Bowie said he expected waiting times to be back to normal by the end of next month.

The average wait to be paid after filing a claim was usually 10 days to three weeks and the total involved was $10 million to $15 million.

In recent weeks that had grown to four to six weeks and involved $20 million to $25 million.

The Southern Cross call-centre has been jammed with calls from policy-holders, some of whom have had to wait hours for answers.

The call-centre has been expanded to cope with the demand.

Mr Bowie denied a report that the payment problems were due to a lacklustre performance in its $220 million invested reserves.

The not-for-profit friendly society says it has maintained its AA-minus credit rating with Standard & Poor's and is financially secure.

The society plans to put premiums up again next year to cover rising costs and the demands of an ageing population.

The cost of an average claim has risen almost $50, or 7.6 per cent a member.

Last year, surgical costs rose 10 per cent, primary care 7 per cent and dental and optical care 3 per cent.

Last February, Southern Cross increased premiums by up to 30 per cent for its 311,600 policy-holders aged over 45. Older members make more and costlier claims than young ones.

The society also introduced a new age band, for those aged 46 to 64, to try to make the premiums fairer.

It plans to bring in more age bands next year.